Huddle, once the hot competition to Box and Dropbox, has quietly confirmed a private equity buyout

Huddle's founders Alastair
Mitchell right and Andy McLoughlin, who left the business in
2015.Huddle

Huddle, the enterprise software startup that was once considered
the hot competition against Box and Dropbox, has quietly
confirmed an effective sale to San Francisco private equity firm
Turn/River.

According to a blog by Huddle CEO
Morten Brøgger, Turn/River has become Huddle's majority
shareholder. He gave no further financial detail, and said the
firm's other investors — Dag Ventures, Eden Ventures, Hermes GPE,
Icon Ventures, Matrix Partners and Zouk — remained minority
shareholders.

The firm will continue trading, with a focus on growing its core
enterprise collaboration business.

He wrote: "This announcement represents a new phase in our
growth. We look forward to working hand in hand with the
Turn/River team to further develop our products, grow our team,
and expand the support that we provide to our customers."

The letter showed the deal was effectively a sale, with a source
pegging the value at around $89 million (£68 million).

The letter, sent in early August, said Turn/River would be
acquiring the bulk of Huddle's shares under what's known as a
"drag along" covenant. This essentially means a majority
shareholder in a company can force minority shareholders to
accept an acquisition.

It also stated that the only people to see a payout would be
Huddle's preferred shareholders, including former chairman
Charles McGregor, Indian investor and former Cisco exec Subrah
Iyar, and early VC investors. Ordinary shareholders, including
employees, were to lose out, though Huddle said it would pay
those shareholders $100 each (£77).

Huddle was once considered a serious rival to bigger competitors
like Box and Dropbox with its enterprise collaboration software.

It is jointly headquartered in San Francisco and London and
raised $89.2 million (£70 million) in venture funding — once at a
reported valuation of $250 to $300 million (£192 million to £231
million).